TMI Blog2014 (10) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the Tribunal was not prepared to accept the basis - it took note of the orders passed in the case of the assessee for the AY 2003-04, 2004-05 and 2005-06 u/s 143(3) of the Income Tax Act, 1961 - when the total turnover was much more than the turnover for the AY 1996-97, 1997-98 and 1998-99, 2% was held to be the gross profit - 2% gross profit has to be taken for the relevant AYs during the block period - Even though the higher margin of turnover is shown for the subsequent years and the very same AO has recorded the finding of 2% profit margin for the period earlier to that where the total turnover is less, the Tribunal was justified in taking the gross profit at 2% - the order of the Tribunal is upheld – Decided against revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 to 31-3-2003. Therefore, in the block period, for the earlier portion, the assessment was made in the name of firm and for the subsequent period, it was made in the made of an individual as proprietor. 4. The Assessing Authority assessed a sum of ₹ 2,67,58,592/- in the hands of Jayesh Mehta for the assessment years 1999-2000 to 2002-03. He assessed the undisclosed income of ₹ 41,40,870/- in the hands of M/s.Shanthilal O Mehta for the earlier periods. Therefore the total undisclosed income assessed was ₹ 3,08,99,462/-. The assessee objected the proposed consideration of the entire credits found in the unaccounted bank accounts as undisclosed income. According to the assessee, the gross profit ratio has to be apportione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year 2004-05, the gross sales of 8.65 crores is taken into consideration and the gross profit was shown as ₹ 15.71 lakhs which is less than 2% and the same was accepted after discussion with the assessee. Similarly, for the assessment year 2005-06, on gross sales of ₹ 11.14 crores, the gross profit was shown as ₹ 31.00 lakhs which is little more than 2%. These assessment orders have been passed subsequent to the block period much after the search. The Tribunal further held that in the comparable cases have not been shown to be comparable by the Department, which assessments have been framed much after the search in the case of the assessee and therefore they declined to accept 4% adopted by the Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antity for the block period and shall pay the tax accordingly. However, the Assessing Authority took that amount in deposit as profit and levied tax. On that basis the First Appellate Authority found fault with the way the Assessing Authority had calculated the undisclosed income and profit thereon. After carefully examining the turnover for 1996-97, 1997-98 and 1998-99 and comparing with the turnover of 1999-2000, 2000-01, 2001-021, 2002-03 and also taking into consideration the profit earned by another firm M/s.SRV and Sons, he was of the view that 4% would be the gross profit of the firm and he wanted the tax to be levied on that basis. The Tribunal found fault with the said finding on the ground that when the First Appellate Authority i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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